Where do I put HSA contributions on the FAFSA?

[privateID]

I assume it goes under untaxed income, similar to my 401K. However, it is not clear to me where it goes. Is it under Other? Here are the option I see:

Payments to tax-deferred pension and retirement savings plans

IRA deductions and payments to self-employed SEP, SIMPLE and Keogh

Child support received

Tax exempt interest income

Untaxed portions of IRA distributions

Untaxed portions of pensions

Housing, food, and other living allowances paid to military, clergy, and others

Veterans noneducation benefits

Other untaxed income not reported such as workers’ compensation or disability benefits

[BelknapPoint]

HSA contributions that are deducted from pay as part of a cafeteria plan are not reported on FAFSA. Extra HSA contributions that are deducted above-the-line on Form 1040 line 25 are reported in FAFSA question 94i (“Other untaxed income not reported such as workers’ compensation or disability benefits”).

[privateID]

Thanks. Does that mean HSAs are not added back in the computation of income (unlike 401Ks that are added back)?
If that’s the case, HSAs are even more valuable.

[4kidsdad]

Does that mean HSAs are not added back in the computation of income (unlike 401Ks that are added back)

I don’t think so. See https://ifap.ed.gov/fsahandbook/attachments/1415AVGCh2.pdf

Questions 45 and 94
Untaxed income
Health savings accounts
Health savings accounts (HSAs) resemble
tax-deferred pension and savings
plans more than flexible spending arrangements;
for example, the balance in
an HSA persists from year to year, while
that in a flexible spending arrangement
must be spent on qualified expenses by
the end of the year. Therefore, treat taxfree
contributions to an HSA as untaxed
income; these will appear on line 25 of
the 2013 IRS Form 1040. The balance in
the account does not count as an asset,
nor would distributions from it count
as untaxed income when they are used
for qualified medical expenses. Distributions
not used for qualified expenses
are subject to income tax (and a possible
penalty) and will be counted in the
adjusted gross income.

[privateID]

4kidsdad - I have seen that. But I just don’t see where it goes?

[4kidsdad]

^Sorry I linked to previous year’s FAFSA. For FAFSA 2016-2017, either 45i (Student) or 94i (Parents)

i. Other untaxed income not reported in items 45a through 45h, such as workers’ compensation, disability benefits, etc. Also include the untaxed portions of health savings accounts from IRS Form 1040—line 25.

i.Other untaxed income not reported in items 94a through 94h, such as workers’ compensation, disability benefits, etc. Also include the untaxed portions of health savings accounts from IRS Form 1040—line 25.

FYI 1040 Line 25

25 Health savings account deduction. Attach Form 8889

[privateID]

ok…I see that. The better question, as BelknapPoint mentions above, is if the HSA is deducted from your paycheck by your employer. I believe these are called cafeteria plans. The directions in 8889 (line 2) specifically say to exclude cafeteria plans. If that’s the case, HSA contributions subtracted from your income by your employer are not included on the FAFSA. Agree?

[4kidsdad]

If that’s the case, HSA contributions subtracted from your income by your employer are not included on the FAFSA. Agree?

Yes, FAFSA asks for 1040 line 25 which doesn’t include pre-tax HSA deductions

[BelknapPoint]

If that’s the case, HSA contributions subtracted from your income by your employer are not included on the FAFSA. Agree?

Yes; cafeteria plan HSA deductions are treated the same as payroll deductions for health, dental and vision insurance (for example). They are not added back to income for FAFSA purposes.